Elektrim on verge of bankruptcy after talks break down

Elektrim stocks plummeted 20% yesterday, reaching an all-time low of zl. 3.30, after the company's creditors voted against a settlement proposed by management. Following this decision the court, which had been mediating between Elektrim and its creditors, closed settlement proceedings, effectively allowing Elektrim's bondholders to file for receivership. "I would like to view this decision by the creditors as an element of negotiations," commented Elektrim president Maciej Radziwill. He said that the company is open to further negotiations and will continue to search for financing to repay debts. In view of a declaration by bondholders that they would reject all settlement proposals, the judge closed settlement proceedings despite the lack of quorum among creditors. If the company goes into receivership, the receiver would liquidate Elektrim's assets, which are estimated to be worth more than the company owes its creditors. "Shareholders would likely be left with around zl. 3.00 per share [after creditors are repaid]," estimates BM BGZ analyst Marcin Sojka. (Puls Biznesu, p. 7) T.J.